Use Special Drawing Rights Allocation to Tackle “climate crisis” in Africa: Jesuits to UK

They say, “While remaining consistent with the IMF’s guidance on how SDRs are to be used, and with the Chancellor’s fiscal rules on borrowing and debt, the UK could still save lives by rechanneling more of its current SDR allocation and selling some of its foreign currency reserves to support sustainable development for climate change resilience and adaptation.”

JENA officials say the UK could use its SDRs through IMF’s Poverty Reduction and Growth Trust (PRGT) or the Resilience and Sustainability Trust (RST). 

PRGT is a program that enables lending of money to the world’s poor nations while the RST is an IMF trust funded by rich countries' unused SDRs to support resilient and sustainable growth in the post COVID-19 period.

In the JENA policy brief titled “Rechanneling the United Kingdom's Allocation of Special Drawing Rights (SDRs) for Climate Finance”, the Jesuit officials say developing nations in sub-Saharan Africa are facing numerous challenges, including climate shocks, which have been further complicated by COVID-19.

“In large part, the COVID-19 economic shock has slowed down the continent’s recovery goals and put its sustainable development and climate change goals on hold,” they say in the statement compiled by JENA Director, Global Policy and Advocacy Officer and the Research and Policy Analyst. 

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For this reason, JENA officials say the UK could channel its SDR allocation to African nations with the aim of preparing for, and responding to, climate shocks.

“The poorer and more climate-vulnerable countries in developing regions like sub-Saharan Africa need low-cost financing in order to build climate resilience and adaptation,” they say. 

They add, “In the wake of the COVID-19 economic shock, these countries do not have access to sufficient and affordable climate finance for adaptation and resilience. Most Sub-Saharan African countries even lack access to disaster funds.”  

JENA officials further say that the SDR allocations could support Sub-Saharan Africa nations’ transition to low-carbon growth paths.

“As the global North makes a green transition away from fossil fuels, Sub-Saharan African countries need support to mobilize longer-term financing for just transitions to low-carbon growth paths,” they say. 

Officials of the department of JCAM add, “The rechanneled UK SDRs could be used to finance policy development and project implementation for resilience, adaptation, and decarbonization.”

“In terms of policy development and implementation, the funds would be used to help countries mainstream resilience, adaptation, and decarbonization into national planning processes and their implementation,” they further say.

JENA officials add that the SDR allocations could be used to provide more resources for projects meant to bolster resilience, climate adaptation, and/or decarbonization as nations shift from fossil fuel production and consumption.

“These funds would complement other sources of public and private financing for climate action,” the Jesuits say in say in the policy briefing published March 21.

Magdalene Kahiu is a Kenyan journalist with passion in Church communication. She holds a Degree in Social Communications from the Catholic University of Eastern Africa (CUEA). Currently, she works as a journalist for ACI Africa.